The dollar index is put under heavy pressure from the decline in long-term government bond yields, all of which is due to the broad expectations of a interest rate cut in the country.
The focus of investors now falls on the next meeting of the central bank's monetary policy on 18-19 June, all expecting signals for the direction of interest rates.
The chances of a fall in interest rates are already 80% and the chance of keeping current levels at just 20%, which is reflected by market participants in dollar prices. The question here is the extent to which the trade war is affecting global economic growth and will there be any need for further measures to address the situation by the end of the year.
Chart: Used with permission from Bloomberg Finance L.P.
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